As millennials begin to enter the homebuying market in larger numbers, homes will get a little smaller, laundry rooms will be essential, and home technology will become increasingly prevalent, panelists said during an International Builders’ Show press conference on home trends and millennials’ home preferences held last week.
NAHB Assistant Vice President of Research Rose Quint predicted that a growing numbers of first-time buyers will drive down home size in 2015 thanks to an improved economy and more lenient lending standards. Three million new jobs were created in 2014, 700,000 more than the previous year “and the most since 1999,” Quint said. At the same time, regulators have reduced downpayment requirements for first-time buyers from 5 percent to 3 percent, while home prices have seen only moderate growth.
“All these events lead me to believe that more people will come into the market, and as younger, first-time buyers, they will demand smaller, more affordable homes,” Quint said. “Builders will build whatever demand calls out for.”
Quint also unveiled the results of two surveys: One asking homebuilders what features they are most likely to include in a typical new home this year, and one asking millennials what features are most likely to affect their home-buying decisions.
Of the top 10 features mentioned by homebuilders, four have to do with energy efficiency: Low-E windows, Energy Star-rated appliances and windows, and programmable thermostats. Other top features include a master bedroom walk-in closet and a separate laundry room.
Least likely features include high-end outdoor kitchens with plumbing and appliances, and two-story foyers and family rooms.
“Consumers don’t like them anymore, so builders aren’t going to build them,” Quint said.
When NAHB asked millennials what features fill their “most-wanted” shopping list, a separate laundry room topped the list, with 55 percent responding that they just wouldn’t buy a new home that didn’t have one. Storage also is important, with linen closets, a walk-in pantry and garage storage making the top 10 — along with Energy Star certifications. In fact, millennials said they would be willing to pay 2 percent to 3 percent more for energy efficiency as long as they can see a return on their power bills.
Respondents said they’d be happy to sacrifice extra finished space or drive a little farther to work, shops and schools in order to afford homeownership, but are unwilling to compromise with less expensive materials.
Seventy-five percent of respondents said they want to live in single-family homes, and 66 percent of them prefer to live in the suburbs. Only 10 percent said they want to stay in the central city. Compared with older generations, millennials are more likely to want to live downtown, but it’s still a small minority share, Quint said.
Panelist Jill Waage, editorial director for home content at Better Homes and Gardens, discussed millennials’ emphasis on the importance of outdoor living and that generation’s seamless use of technology, and how those two trends play into their homebuying and home-renovation decisions.
Because they generally don’t have as much ready cash — or free time — as older homeowners, millennials often seek less expensive, low-maintenance choices like a brightly painted front door, strings of garden lights, and landscaping that needs less watering and mowing, like succulent plants and larger patios.
Because this generation is very comfortable with their smartphones and tablets, they’ll increasingly seek ways to control their heating, air-conditioning, security and lighting, as well as electronics, such as televisions and sound systems, from their phones.
“They want to use their brains for other things, not for remembering whether they adjusted the heat or closed the garage door,” Waage said.